One of the most common reasons people come to see us at Miramontes Capital is that they feel that they have a lack of information about retirement and its processes.
How do you think you stack up? This week’s blog includes a (very short) quiz on some basic retirement principles. Once you’ve got your answers, you can scroll down to the bottom to check how you did.
1. What is the lump sum you and your family can plan to spend during retirement?
A/ $100,000
B/ $300,000
C/ $1 Million or more
2. What is a safe average annual rate of withdrawal for your account?
A/ 1 to 3%
B/ 3 to 5%
C/ 10%
3. On average, Social Security stands for about what percent of retirees’ monthly income?
A/ 40%
B/ 60%
C/ 90%
Answers at the bottom of the post.
- What is the lump sum you and your family can plan to spend during retirement?
If you chose $300,000 that puts you in line with the ideas of most people. While I’m not saying it’s impossible to make that sum work for you, preparing for contingencies like health care makes C look less and less like being overprepared.
- What is a safe average annual rate of withdrawal for your account?
A is obviously safe, too, but an average rate of withdrawal of 4%, give or take a percent, is usually just right for maintaining a comfortable living, but playing it safe. 10% might cause you to spread your money too thin, especially with no other income sources.
- On average, Social Security stands for about what percent of retirees’ monthly income?
Social Security is dependable income, which is invaluable to retirees. But it’s good to not overestimate this. The Social Security website itself states that the income it provides is normally meant to be about 40% of the income you were used to when you were working. For many, it will be the biggest single source of income they get, but at less than half of working wages, this alone won’t be your bread and butter.
Everyone is different.
A retirement planner in Costa Mesa has to be attuned to this, as it’s a city that is built of a wide range of incomes, and a variety of different stories and backgrounds. This can be said for most places, though, and people in general. People have different stories, preoccupations, complications, all of which have a bearing on their personal finances.
At Miramontes Capital we have an established practice when it comes to meeting with clients. It’s our goal to become informed, in order to inform. We don’t start firing off advice until we first allow you to inform us about your situation, your fears, your goals, and your current situation. Our pledge is to never talk down to you, or talk over your head. We see what you, as a person, need to know and give it to you. And we do this because we feel that’s what a retirement planner should be capable of doing.
We’re looking forward to learning your needs. Your retirement planner in Orange County.
Answers:
1. C 2. B 3. A